Self build but not quite. What mortgage do I need?

catgirl1985

We have a house worth £350000, mortgage about £190000. With the property is a piece of land which in the recent past had planning permission to build a single detached dwelling. Build cost circa £150000. We want to build on the plot ourselves and then sell the new dwelling. Our reasons for building it ourselves rather than selling the plot to a developer are that we want control of it. By which I mean we are concerned about a developer buying it and land banking it or leaving if half finished, as we will remain living in the main house.

The end value of the new dwelling is £250000 to £295000 (a very similar design built by a developer sold off plan within 2 months for £295k) So at least £100k profit. The value of our house afterwards is about £275000 to £300000 so we would remain at less than 70% LTV.

My question is : what type of mortgage do we need to build this new house? I am not sure it is self build as we are building to sell on. So is it a business loan? What would be the criteria on a loan like this - could we borrow the £150000. We have £30000 savings - could we say that is our repayment vehicle until we sell the house as we would have 2 to 3 years worth of repayments there

amnblog

This is development and you need a broker.


Your best option may be to do a deal with an experienced developer.